As expected, the metal has reached the 1,340.00 level. Although, it has happened a lot sooner than initially assumed.
Note that the surge was almost vertical. This indicates that there should be a period of trading sideways.
Meanwhile, take note that the previous sideways consolidation was short lived and the surge quickly resumed.
This week will have various data releases in various countries that will influence many currency exchange rates.
The main event of the week will be the release of the Federal Open Markets Committee Meeting Minutes today. The FOMC Meeting Minutes will be published at 19:00 GMT. They are expected to cause an impact on all USD pairs.
On Thursday, EUR traders will pay attention to the Markit released European Services and Manufacturing PMIs. The German release at 08:30 GMT is the most important.
Later on during the same day the US Durable Goods Orders and Core Durable Goods Orders will be published.
The week will end with the Canadian Core Retail Sales at 13:30 GMT on Friday.
All of these events are scheduled to be covered by Dukascopy Analytics on our Dukascopy Webinars YouTube channel. The streams start ten minutes before the data release.
For more information watch the weekly Calendar Analysis stream recording.
XAU/USD short term forecast
After the sharp surge the pair retraced back down and found support in the already broken resistance line of a narrow channel up pattern.
On Wednesday, the pair had no resistance as high as the 1,358.10 level, where a monthly pivot point was located at.
Meanwhile, it is expected that after the recent five consecutive trading sessions with gains of 40 USD the commodity price should trade sideways and consolidate its gains.
Hourly Chart
The ascending pattern on the daily chart remains intact. If the metal trades in accordance with the pattern, the upper trend line of it will slow down the surge.Although, the metal can still continue to surge to the monthly R2 at 1,358.11 at a different angle. The difference from the recent past will be that the surge will take longer time.
On the other hand, sideways trading above the support of the monthly R1 at 1,340.10 or a decline below it are still possible.
Daily Chart
Sentiment remains bearish on gold
The total volume of open positions on the Swiss Foreign Exchange indicates that traders are shorting gold.
Namely, since Tuesday the open position volume has been 67% short.
Most likely traders are expecting a consolidating decline in the aftermath of the recent surges.
Meanwhile, the trader set up pending orders in a 1000 base point range around the metal's current price reveal additional information.
Namely, trader pending orders were mostly still set to sell the commodity. However, the proportion of sell orders from the total orders had decreased from 67% on Tuesday to 55% on Wednesday.